Labor Logic

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John D. Finerty, Jr.

A collective bargaining agreement is a contract between an employer and a labor union. The rules on interpreting and enforcing collective bargaining agreements, however, are anything but simple. The rules include the Labor Management Relations Act or LMRA, the Norris-LaGuardia Act and the common law of contracts.

When one party seeks a preliminary injunction to enjoin a breach of a collective bargaining agreement, traditional equitable principles apply as well.

The recent case of East St. Louis Laborers’ Local 100 v. Bellin Wrecking & Salvage Co., Case No. 05-1236 (7th Cir. Jul. 6, 2005), illustrates how equitable rules apply. The court in Bellin Wrecking held that a union was not entitled to a preliminary injunction because it could not show irreparable harm. The employer’s decision to lay off a laborer, in lieu of an employee from a neighboring union, did not meet the irreparable harm standard because the contract violation, if any, could be remedied by traditional monetary damages such as a backpay award.

An Outline Of The Rules

Congress passed the Norris-LaGuardia Act in 1932 to prohibit injunctions against labor unions by, primarily, state courts. Before Norris-LaGuardia, state courts typically issued injunctions against strikes as either criminal conspiracies or violations of anti-trust laws. Congress later passed the Labor Management Relations Act, that allows lawsuits against unions or employers for breach of a collective bargaining agreement, and the Supreme Court held in Boys Markets, Inc. v. Retail Clerks Union, 398 U.S. 235 (1970), that courts could issue injunctions against such breaches. The Seventh Circuit has also required that a party seeking an injunction also satisfy the equitable requirements for relief pending trial.

Equitable Elements

The leading case in the Seventh Circuit that describes the equitable principles required for issuance of a preliminary injunction is Rolland Machinery Co. v. Dresser Indus., Inc., 749 F.2d 380 (7th Cir. 1984). Under Rolland Machinery, the traditional equitable elements that must be met before a court can issue a preliminary injunction are the following. First, the plaintiff must demonstrate it has no adequate remedy at law and that it will suffer irreparable harm if the injunction is not granted; "the absence of an adequate remedy at law is a precondition to any form of equitable relief." Id. at 386. Where the only remedy sought at trial is damages, however, these two elements merge.

Next, any irreparable harm the defendant may suffer must also be considered. The defendant’s harm — that must also be irreparable to defeat an injunction — cannot be cured by prevailing at trial or by collecting against an injunction bond required by Rule 65(c), Fed. R. Civ. P. In addition, the court must review the merits of the underlying claim to determine if the plaintiff has at least some chance of success on the merits; it then balances the strength of the plaintiff’s case with the relative harms.

In other words, "the more likely the plaintiff is to win, the less heavily need the balance of harms weigh in his favor; the less likely he is to win, the more need it weigh in his favor." Id., at 387.

The Bellin Wrecking Case

Bellin Wrecking’s collective bargaining agreement with Local 100 of the East St. Louis Laborers union required that it hire only Local 100 members for highway construction work. In June 2004, Bellin began work on a bridge over the Mississippi River that required it to begin work in St. Louis, Missouri and finish at the other end of the bridge in East St. Louis, Illinois. Local 100’s jurisdiction covered the Illinois side of the river, but the Missouri Laborers covered the St. Louis side. Bellin hired a Missouri laborer as its lead person on the bridge project, with Local 100’s consent. Local 100, however, contended that it only allowed Bellin to use the Missouri Laborers after Bellin agreed to hire two Local 100 members.

A conflict arose when Bellin laid off a Local 100 laborer before its Missouri lead man. The laid off Local 100 employee, with other Local 100 members, picketed the jobsite in protest. Local 100 then sued for breach of the collective bargaining agreement in St. Claire County, Illinois. The state court issued a temporary restraining order.

Bellin removed the case to federal court under § 301 of the LMRA and ERISA. The state court’s temporary restraining order remained in place, so Bellin moved to dissolve the state court’s order and the union moved for a preliminary injunction. The U.S. District Court for the Southern District of Illinois granted the union’s request for a preliminary injunction. The Seventh Circuit Court of Appeals, however, reversed and remanded with instructions to dissolve the injunction because the union could not show irreparable harm.

Analysis

Local 100 sought a status quo injunction to ensure its member was able to work on the bridge project in compliance with the collective bargaining agreement. But its damages for breach of contract were purely monetary damages, so an award of money after a trial would have been adequate. The union made multiple arguments to overcome this equitable requirement, but none of its arguments carried the day.

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The union argued that Bellin Wrecking’s breach was ongoing and thus created irreparable harm. An ongoing breach, however, created only an issue of the amount of damages; it was not, alone, irreparable harm. It also claimed that its members would loose confidence in the union if Bellin could violate the contract with apparent impunity. The court called that injury "speculative," because its position might still be vindicated at trial.

The court also rejected arguments that the permanent loss of employment to one employee was irreparable because calculating damages, including lost benefits and lost future job opportunities, would be difficult. These related arguments cut two ways, however. The court clearly believed a monetary award would adequately remedy the breach, but the union’s claim that damages could not be fully known lead the court to announce they may be merely speculative rather than difficult to calculate: "a plaintiff cannot obtain a preliminary injunction by speculating about hypothetical future injuries."

For more information on this case, contact John D. Finerty, Jr. at Michael Best & Friedrich LLP at (414) 225-8269 or by email.